EX-10 10 e765435.txt EXHIBIT 10.4 Exhibit 10.4 LOAN AGREEMENT THIS LOAN AGREEMENT ("Agreement"), dated as of the 13th day of June, 2000, is made and entered into on the terms and conditions hereinafter set forth, by and between NeighborhoodFind.com, LLC, a Delaware limited liability company ("Borrower"), and COMMERCE CAPITAL, L.P., a Tennessee limited partnership ("Lender"). RECITALS: WHEREAS, Borrower has requested that Lender make available to Borrower a term loan in the original principal amount of Eight Hundred Thousand Dollars ($800,000.00) (the "Loan") on the terms and conditions hereinafter set forth, and for the purpose(s) hereinafter set forth; and WHEREAS, in order to induce Lender to make the Loan to Borrower, Borrower has made certain representations to Lender; and WHEREAS, Lender, in reliance upon the representations and inducements of Borrower, has agreed to make the Loan upon the terms and conditions hereinafter set forth. AGREEMENT: NOW, THEREFORE. in consideration of the agreement of Lender to make the Loan, the mutual covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree as follows: ARTICLE 1 THE LOAN 1.1 Evidence of Loan Indebtedness and Repayment. Subject to the terms and conditions contained herein, the Lender shall make the Loan to Borrower by wire transfer in immediately available funds. The Loan shall be evidenced by a Secured Promissory Note in the original principal amount of Eight Hundred Thousand Dollars ($800,000), dated as of the date hereof, executed by Borrower in favor of Lender (the "Note"). The Loan shall be payable in accordance with the terms of the Note. The Note, this Agreement and any other instruments and documents executed by Borrower, any guarantor of Borrower, or any shareholder, member, partner, subsidiary or affiliate of Borrower or of any guarantor of Borrower (individually, "Affiliate," and collectively, "Affiliates"), now or hereafter evidencing, securing or in any way related to the indebtedness evidenced by the Note are herein individually referred to as a "Loan Document" and collectively referred to as the "Loan Documents." The term "Obligations" as used herein shall refer to (a) the Loan to be made concurrently or in connection with this Agreement, as evidenced by the Note, and any renewals or extensions thereof, (b) the full and prompt payment and performance of any and all other indebtednesses and other obligations of Borrower to Lender, direct or contingent (including but not limited to obligations incurred as indorser, guarantor or surety), however evidenced or denominated, and however and whenever incurred, including but not limited to indebtednesses incurred pursuant to any present or future commitment of Lender to Borrower and (c) all future advances made by Lender for taxes, levies, insurance and preservation of the Collateral and all attorneys' fees, court costs and expenses of whatever kind incident to the collection of any of said indebtedness or other obligations and the enforcement and protection of the security interest created hereby or by the other Loan Documents. 1.2 Processing Fee. Borrower shall pay Lender a processing fee of $16,000.00, which shall be paid on the date the Loan is funded. 1.3 Prepayment. Borrower may prepay the indebtedness evidenced by the Note in whole or in part at any time and from time to time, without penalty or premium. 1.4 Purposes of Loan and Use of Proceeds. The purpose of the Loan shall be to provide additional acquisition and working capital to Borrower. ARTICLE 2 REPRESENTATIONS AND WARRANTIES 2.1 Borrower's Representations. Except to the extent set forth on the Borrower's Schedule of Exceptions attached hereto, Borrower hereby represents and warrants to Lender as follows: (a) Corporate Status. Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware; and has the power to own and operate its properties, to carry on its business as now conducted and to enter into and to perform its obligations under this Agreement and the other Loan Documents to which it is a party. Borrower is duly qualified to do business and is in good standing in each state in which a failure to be so qualified would have a material adverse effect on Borrower's financial condition or its ability to conduct its business in the manner now conducted. (b) Subsidiaries. Borrower neither owns nor has an interest in, directly or indirectly, any other corporation, partnership, joint venture or other business organization ("Subsidiaries"). (c) Authorization. Borrower has full legal right, power and authority to conduct its business and affairs. Borrower has full legal right, power and authority to enter into and perform its obligations under the Loan Documents, without the consent or approval of any other person, firm, governmental agency or other legal entity. The execution and delivery of this Agreement, the borrowing hereunder, the execution and delivery of each Loan Document to which Borrower is a party, and the performance by Borrower of its obligations thereunder are within the powers of Borrower and have been duly authorized by all necessary action properly taken and Borrower has received all necessary governmental approvals, if any, that are required. The officer(s) 2 executing this Agreement, the Note and all of the other Loan Documents to which Borrower is a party are duly authorized to act on behalf of Borrower. (d) Validity and Binding Effect. This Agreement and the other Loan Documents are the legal, valid and binding obligations of the Borrower, enforceable in accordance with their respective terms, subject to limitations imposed by bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally or the application of general equitable principles. (e) Capitalization. As of the date hereof, all outstanding membership interests of Borrower (the "Interests") are set forth on Schedule 2.1(e) attached hereto. All membership interests of Borrower which are reserved for issuance upon exercise of the Membership Interest Purchase Warrant dated as of the date hereof and issued to Lender (the "Warrant") are set forth on Schedule 2.1(e) attached hereto; provided, however, that the units of membership interests reserved for issuance upon exercise of the Warrant may be increased from time to time in accordance with the term of the Warrant. As of the date hereof, Borrower does not have outstanding any securities convertible or exchangeable for any of its membership interests or containing any profit participation features, and does not have outstanding any rights or options to subscribe for or to purchase its membership interests, except as set forth on Schedule 2.1(e) and the Warrant. As of the date hereof, Borrower is not subject to any obligation (contingent or otherwise) to repurchase, redeem, retire or otherwise acquire any of its membership interests or any warrants, options or other rights to acquire its membership interests, except as set forth in the Warrant or on Schedule 2.1(e). As of the date hereof, all of the outstanding membership interests of Borrower are validly issued, fully paid and nonassessable. Except as set forth on Schedule 2.1(e), there are no statutory or contractual preemptive rights, rights of first refusal, anti-dilution rights or any similar rights, held by members or option holders of Borrower, with respect to the issuance of the Warrant or the issuance of the membership interests upon exercise of the Warrant, and all such rights have been effectively waived with regard to the issuance of the Warrant, the exercise of the Warrant and the issuance of the membership interests upon exercise of the Warrant. Borrower has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any of its membership interests, and the offer, sale and issuance of the Warrant hereunder do not require registration under the Securities Act of 1933, as amended, or any applicable state securities laws. To the best of Borrower's knowledge, there are no agreements among Borrower's members with respect to any other aspect of Borrower's affairs, except as set forth on Schedule 2.1(e). 3 (f) Trademarks, Patents, Etc. Schedule 2.1(f) is an accurate and complete list of all patents, trademarks, tradenames, trademark registrations, service names, service marks, copyrights, licenses, formulas and applications therefor owned by Borrower or used or required by Borrower in the operation of its business, title to each of which is, except as set forth in Schedule 2.1(f) hereto, held by Borrower free and clear of all adverse claims, liens, security agreements, restrictions or other encumbrances. Except as set forth in Schedule 2.1(f), Borrower owns or possesses adequate (and will use its best efforts to obtain as expediently as possible any additional) licenses or other rights to use all patents, trademarks, trade names, service marks, trade secrets or other intangible property rights and know-how necessary to entitle Borrower to conduct its business as presently being conducted. There is no infringement action, lawsuit, claim or complaint which asserts that Borrower's operations violate or infringe the rights or the trade names, trademarks, trademark registrations, service names, service marks or copyrights of others with respect to any apparatus or method of Borrower or any adversely held trademarks, trade names, trademark registrations, service names, service marks or copyrights, and Borrower is not in any way making use of any confidential information or trade secrets of any person, except with the consent of such person. Except as set forth in Schedule 2.1(f), Borrower has taken reasonable steps to protect its proprietary information (except disclosure of source codes pursuant to licensing agreements) and is the lawful owner of the proprietary information free and clear of any claim of any third party. As used herein, "proprietary information" includes without limitation, (i) any computer programming language, software, hardware, firmware or related documentation, inventions, technical and nontechnical data related thereto, and (ii) other documentation, inventions and data related to patterns, plans, methods, techniques, drawings, finances, customer lists, suppliers, products, special pricing and cost information, designs, processes, procedures, formulas, research data owned or used by Borrower or marketing studies conducted by Borrower, all of which Borrower considers to be commercially important and competitively sensitive and which generally has not been disclosed to third parties. (g) No Conflicts. Consummation of the transactions contemplated hereby and the performance of the obligations of Borrower under and by virtue of the Loan Documents do not conflict with, and will not result in any breach of, or constitute a default or trigger a lien under, any mortgage, security deed or agreement, deed of trust, lease, bank loan or credit agreement, corporate charter or bylaws, agreement or certificate of limited partnership, partnership agreement, license, franchise or any other instrument or agreement to which Borrower is a party or by which Borrower or its respective properties may be bound or affected or to which Borrower has not obtained an effective waiver. (h) Litigation. There are no actions, suits, arbitrations, administrative hearings or other proceedings pending, or, to the knowledge of Borrower, threatened, against or affecting Borrower or NeighborhoodFind.com, Inc., a Virginia corporation ("NFI") or any of their respective property or involving the validity or enforceability of 4 any of the Loan Documents at law or in equity, or before any governmental or administrative agency. To Borrower's knowledge, neither Borrower nor NFI is subject to any order, writ, injunction, decree or demand of any court or any governmental authority. (i) Financial Statements. The financial statements of NFI dated ________________ 2000, which are attached hereto as Schedule 2.1(i)(A), are true and correct in all material respects, have been prepared on the basis of generally accepted accounting principles consistently applied, and fairly present the financial condition of NFI as of the date(s) thereof. No material adverse change has occurred in the financial condition of Borrower or NFI, considered on a consolidated basis, since the date(s) thereof, and no additional borrowings have been made by Borrower or NFI since the date(s) thereof other than as set forth on Schedule 2.1(i)(B). (j) Conveyance of NFI Assets. As of the Closing Date, NFI shall have conveyed to Borrower substantially all of the assets owned by NFI, including without limitation equipment, inventory, computer software, know-how, trademarks and trade names, and other intangible assets, and has assigned to Borrower all leases, licenses, contracts and other rights to possess or use assets owned by third parties. Borrower owns or has a valid right to use and/or possess all tangible and intangible assets necessary for it to conduct the business previously conducted by NFI. (k) Other Agreements; No Defaults. Neither Borrower nor NFI is a party to any indenture, loan or credit agreement, lease or other agreement or instrument, or subject to any charter or corporate restriction, or any restriction in its articles of incorporation, bylaws, certificate of formation or operating agreement that could have a material adverse effect on the business, properties, assets, operations or conditions, financial or otherwise of Borrower or NFI, or the ability of Borrower or NFI to carry out their obligations under the Loan Documents to which they are a party. Neither Borrower nor NFI is in default in any respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument material to their businesses to which it is a party, including but not limited to this Agreement and the other Loan Documents, and no other default or event has occurred and is continuing that with notice or the passage of time or both would constitute a default or event of default under any of same. (l) Compliance With Law. Borrower has obtained all necessary licenses, permits and approvals and authorizations necessary or required in order to conduct its business and affairs as heretofore conducted and as hereafter intended to be conducted. Borrower is in compliance with all laws, regulations, decrees and orders applicable to it (including but not limited to laws, regulations, decrees and orders relating to environmental, occupational and health standards and controls, antitrust, monopoly, restraint of trade or unfair competition), except to the extent that any noncompliance, in the aggregate, cannot reasonably be expected to have a material adverse effect on its business, operations, property or financial condition and will not materially adversely affect Borrower's ability to perform its obligations under the Loan Documents. 5 (m) Debt. Schedule 2.1(m) is a complete and correct list of all credit agreements, indentures, purchase agreements, promissory notes and other evidences of indebtedness, guaranties, capital leases and other instruments, agreements and arrangements presently in effect providing for or relating to extensions of credit (including agreements and arrangements for the issuance of letters of credit or for acceptance financing) in respect of which the Borrower, NFI or any of their properties is in any manner directly or contingently obligated and the maximum principal or face amounts of the credit in question that are outstanding and that can be outstanding are correctly stated, and all liens of any nature given or agreed to be given as security therefor are correctly described or indicated in Schedule 2.1(l). (n) Taxes. NFI has filed or caused to be filed all tax returns that are required to be filed (except for returns that have been appropriately extended), and has paid, or will pay when due, all taxes shown to be due and payable on said returns and all other taxes, impositions, assessments, fees or other charges imposed on it by any governmental authority, agency or instrumentality, prior to any delinquency with respect thereto (other than taxes, impositions, assessments, fees and charges currently being contested in good faith by appropriate proceedings, for which appropriate amounts have been reserved). No tax liens have been filed against NFI or any of its property. Borrower is newly organized and has not yet been required to file any tax return. (o) Certain Transactions. Except as set forth on Schedule 2.1(o) hereto, neither Borrower nor NFI is indebted, directly or indirectly, to any of its members, managers, shareholders, officers or directors or to their respective spouses or children, in any amount whatsoever, and none of said members, managers, shareholders, officers or directors or any members of their immediate families, are indebted to Borrower or NFI or have any direct or indirect ownership interest in any firm or corporation with which Borrower or NFI has a business relationship, or any firm or corporation which competes with Borrower or NFI, except that members, managers, shareholders, officers and/or directors of Borrower or NFI may own no more than 4.9% of outstanding stock of publicly traded companies which may compete with Borrower or NFI. No member, manager, shareholders, officer or director of Borrower or NFI or any member of their immediate families, is, directly or indirectly, interested in any material contract with Borrower or NFI. Neither Borrower nor NFI is a guarantor or indemnitor of any indebtedness of any other person, firm, corporation or other legal entity. (p) Statements Not False or Misleading. No representation or warranty given as of the date hereof by Borrower contained in this Agreement or any schedule attached hereto or any statement in any document, certificate or other instrument furnished or to be furnished by Borrower to Lender pursuant hereto, taken as a whole, contains or will (as of the time so furnished) contain any untrue statement of a material fact, or omits or will (as of the time so furnished) omit to state any material fact which is necessary in order to make the statements contained therein not misleading. 6 (q) Margin Regulations. Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock. No proceeds received pursuant to this Agreement will be used to purchase or carry any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. (r) Significant Contracts. Schedule 2.1(r) is a complete and correct list of all contracts, agreements and other documents pursuant to which Borrower or NFI receives revenues in excess of $25,000 per fiscal year or has committed to make expenditures in excess of $25,000 per fiscal year. Each such contract, agreement and other document is in full force and effect as of the date hereof and Borrower knows of no reason why such contracts, agreements and other documents would not remain in full force and effect pursuant to the terms thereof. (s) Environment. Borrower and NFI have duly complied with, and their businesses, operations, assets, equipment, property, leaseholds or other facilities are in compliance with, the provisions of all federal, state and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations promulgated thereunder. Borrower and NFI have been issued and will maintain all required federal, state and local permits, licenses, certificates and approvals relating to (i) air emissions; (ii) discharges to surface water or groundwater; (iii) noise emissions; (iv) solid or liquid waste disposal; (v) the use, generation, storage, transportation or disposal of toxic or hazardous substances or wastes (which shall include any and all such materials listed in any federal, state or local law, code or ordinance and all rules and regulations promulgated thereunder as hazardous or potentially hazardous); or (vi) other environmental, health or safety matters. Neither Borrower nor NFI have received notice of, or knows of, or suspects facts which might constitute any violations of any federal, state or local environmental, health or safety laws, codes or ordinances, and any rules or regulations promulgated thereunder with respect to their businesses, operations, assets, equipment, property, leaseholds, or other facilities. To the best knowledge of Borrower and NFI, except in accordance with a valid governmental permit, license, certificate or approval, there has been no emission, spill, release or discharge into or upon (i) the air; (ii) soils, or any improvements located thereon; (iii) surface water or groundwater; or (iv) the sewer, septic system or waste treatment, storage or disposal system servicing the premises, of any toxic or hazardous substances or wastes at or from the premises; and, to the best knowledge of Borrower and NFI, accordingly the premises of Borrower and NFI are free of all such toxic or hazardous substances or wastes. To the best knowledge of Borrower and NFI, there has been no complaint, order, directive, claim, citation or notice by any governmental authority or any person or entity with respect to (i) air emissions; (ii) spills, releases or discharges to soils or improvements located thereon, surface water, groundwater or the sewer, septic system or waste treatment, storage or disposal systems servicing the premises; (iii) noise emissions; (iv) solid or liquid waste disposal; (v) the use, generation, storage, transportation or disposal of toxic or hazardous substances or waste; or (vi) other environmental, health or safety matters affecting Borrower, NFI or their 7 businesses, operations, assets, equipment, property, leaseholds or other facilities. To the best knowledge of Borrower and NFI, neither Borrower nor NFI has any indebtedness, obligation or liability (absolute or contingent, matured or not matured), with respect to the storage, treatment, cleanup or disposal of any solid wastes, hazardous wastes or other toxic or hazardous substances (including without limitation any such indebtedness, obligation, or liability with respect to any current regulation, law or statute regarding such storage, treatment, cleanup or disposal). (t) Fees/Commissions. Neither Borrower nor NFI have agreed to pay any finder's fee, commission, origination fee (except for the processing and commitment fees due pursuant to Section 1.2 hereof and except as set forth on Schedule 2.1(t) hereto) or other fee or charge to any person or entity with respect to the Loan and investment transactions contemplated hereunder. (u) ERISA. Borrower and NFI are in compliance in all material respects with all applicable provisions of Title IV of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, September 2, 1974, 88 Stat. 829, 29 U.S.C.A.ss. 1001 et seq. (1975), as amended form time to time ("ERISA"). Neither a reportable event nor a prohibited transaction (as defined in ERISA) has occurred and is continuing with respect to any pension plan that is subject to the requirements of ERISA (a "Plan"); no notice of intent to terminate a Plan has been filed nor has any Plan been terminated; no circumstances exist which constitute grounds entitling the Pension Benefit Guaranty Corporation (together with any entity succeeding to any or all of its functions, the "PBGC") to institute proceedings to terminate, or appoint a trustee to administer, a Plan, nor has the PBGC instituted any such proceedings; neither Borrower nor any commonly controlled entity (as defined in ERISA) has completely or partially withdrawn from a multiemployer plan (as defined in ERISA); Borrower and each commonly controlled entity has met its minimum funding requirements under ERISA with respect to all of its Plans and the present fair market value of all Plan property exceeds the present value of all vested benefits under each Plan, as determined on the most recent valuation date of the Plan and in accordance with the provisions of ERISA and the regulations thereunder for calculating the potential liability of Borrower or any commonly controlled entity to the PBGC or the Plan under Title IV or ERISA; and neither Borrower nor any commonly controlled entity has incurred any liability to the PBGC under ERISA. (v) Title to Properties. Borrower and NFI have good, indefeasible and insurable title to, or valid leasehold interests in, all their real properties and other assets, free and clear of all liens other than Permitted Liens (as defined in Section 3.15 hereof). 8 (w) Limited Offering of Note and Warrant. Neither Borrower nor anyone acting on its behalf has offered the Note, the Warrant or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof, with, any person other than Lender and not more than 35 other institutional investors. Neither Borrower nor anyone acting on its behalf has taken, or will take, any action which would subject the issuance or sale of the Note and Warrant to Section 5 of the Securities Act of 1933, as amended, or the registration or qualification provisions of the blue sky laws of any state in which the issuance or sale of the Note and Warrant otherwise would be required to be registered or qualified. (x) Registration Rights. Except as described in the Warrant, Borrower is not under any obligation to register under the Securities Act of 1933, as amended, or the Trust Indenture Act of 1939, as amended, any of its presently outstanding securities or any of its securities that may subsequently be issued. (y) Employees. Neither Borrower nor NFI has any current labor problems or disputes which have resulted or Borrower reasonably believes could be expected to have a material adverse effect on the operations, properties or financial condition of Borrower or NFI or on their ability to perform their obligations hereunder. (z) Issuance Taxes. All taxes imposed on Borrower in connection with the issuance, sale and delivery of the Note, the Warrant and the membership interest units issuable upon exercise of the Warrant have been or will be fully paid, and all laws imposing such taxes have been or will be fully satisfied by Borrower. (aa) Solvency. As of the date hereof and giving effect to the making of the Loan, Borrower (i) has capital reasonably sufficient to carry on its business and transactions and all business and transactions in which it is about to engage and is able to pay its debts as they mature, (ii) owns property having a value, both at fair valuation and at present fair saleable value, greater than the amount required to pay its probable liabilities (including contingencies), and (iii) does not believe that it will incur debts or liabilities beyond its ability to pay such debts or liabilities as they mature. (bb) Location of Properties, Places of Business. The only jurisdictions in which Borrower maintains any tangible personal property or carries on business are as listed in Schedule 2.1(aa) hereto. All billings for the supply of goods and services by Borrower are made from, and require payment to be made to, the chief executive office of the Borrower. (cc) Year 2000 Compatibility. Borrower has reviewed its financial accounting systems and other computer systems for year 2000 compatibility and has not identified any issues that could have a material adverse effect on Borrower's business, operations, property or financial condition. ARTICLE 3 COVENANTS AND AGREEMENTS 9 Borrower covenants and agrees that during the term of this Agreement: 3.1 Payment of Obligations. Borrower shall pay the indebtedness evidenced by the Note according to the terms thereof, and shall timely pay or perform, as the case may be, all of the other obligations of Borrower to Lender, direct or contingent, however evidenced or denominated, and however and whenever incurred, including but not limited to indebtedness incurred pursuant to any present or future commitment of Lender to Borrower, together with interest thereon, and any extensions, modifications, consolidations and/or renewals thereof and any notes given in payment thereof. 3.2 Financial Statements and Reports. Borrower shall furnish to Lender (a) as soon as practicable and in any event within ninety (90) days after the end of each fiscal year of Borrower, an audited balance sheet of Borrower as of the close of such fiscal year, an audited statement of operations of Borrower as of the close of such fiscal year and an audited statement of cash flows for Borrower for such fiscal year, prepared in accordance with generally accepted accounting principles consistently applied and accompanied by an unqualified audit report prepared by an independent certified public accountant acceptable to Lender showing the financial condition of Borrower at the close of such fiscal year and the results of its operations during such fiscal year and accompanied by a certificate of the President of Borrower, stating that to the best of the knowledge of such officer, Borrower has kept, observed, performed and fulfilled each covenant, term and condition of this Agreement and the other Loan Documents during the preceding fiscal year and that no Event of Default has occurred and is continuing (or if an Event of Default has occurred and is continuing, specifying the nature of same, the period of existence of same and the action Borrower proposes to take in connection therewith), (b) within thirty (30) days of the end of each calendar month, a status report indicating the financial performance of Borrower during such month and the financial position of Borrower as of the end of such month in the format required by Lender (which format will be delivered to Borrower on a diskette), (c) within sixty (60) days of the end of each quarter, a balance sheet of Borrower as of the close of such quarter and a statement of operations of Borrower as of the close of such quarter, all in reasonable detail, and prepared substantially in accordance with generally accepted accounting principles consistently applied (except for the absence of footnotes and subject to year-end adjustments), and (d) with reasonable promptness, such other financial data, including without limitation, accounts receivable agings, as Lender may reasonably request. Without Lender's prior written consent, Borrower shall not modify or change any accounting policies or procedures, including Borrower's fiscal year, in effect on the date hereof. 3.3 Maintenance of Books and Records; Inspection. Borrower shall maintain its books, accounts and records in accordance with generally accepted accounting principles consistently applied, and after reasonable notice from Lender permit Lender, its officers and employees and any professionals designated by Lender in writing, at Borrower's expense, to visit and inspect any of its properties, corporate books and financial records, and to discuss its accounts, affairs and finances with Borrower or the principal officers of Borrower during reasonable business hours, all at such times as Lender may reasonably request; provided that no such inspection shall materially interfere with the conduct of Borrower's business. Notwithstanding anything in this paragraph to the contrary, except upon the occurrence of an 10 Event of Default, Borrower shall not be required to pay the expenses associated with any such inspection more than once in any calendar year. 3.4 Insurance. Without limiting any of the requirements of any of the other Loan Documents, Borrower shall maintain, in amounts customary for entities engaged in comparable business activities, (a) to the extent required by applicable law, worker's compensation insurance (or maintain a legally sufficient amount of self insurance against worker's compensation liabilities, with adequate reserves, under a plan approved by Lender, such approval not to be unreasonably withheld or delayed), and (b) fire and "all risk" casualty insurance on its properties against such hazards and in at least such amounts as are customary in Borrower's business. Borrower will make reasonable efforts to obtain and maintain public liability insurance in an amount, and at a cost, deemed reasonable to the Borrower's Board of Managers. At the request of Lender, Borrower will deliver forthwith a certificate specifying the details of such insurance in effect. 3.5 Taxes and Assessments. Borrower shall (a) file all tax returns and appropriate schedules thereto that are required to be filed under applicable law, prior to the date of delinquency, (b) pay and discharge all taxes, assessments and governmental charges or levies imposed upon Borrower upon its income and profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and (c) pay all taxes, assessments and governmental charges or levies that, if unpaid, might become a lien or charge upon any of its properties; provided, however, that Borrower in good faith may contest any such tax, assessment, governmental charge or levy described in the foregoing clauses (b) and (c) so long as appropriate reserves in accordance with generally accepted accounting principles are maintained with respect thereto. 3.6 Existence. Borrower shall maintain its existence and good standing in the state of its organization, and its qualification to do business and good standing as a foreign entity in each jurisdiction in which such qualification is necessary pursuant to applicable law. 3.7 Compliance with Law and Other Agreements. Except where the failure to do so would not materially adversely affect Borrower's operations, properties, financial condition or its ability to fulfill its obligations under the Loan Documents, Borrower shall maintain its business operations and property owned or used in connection therewith in compliance with (a) all applicable federal, state and local laws, regulations and ordinances governing such business operations and the use and ownership of such property, and (b) all agreements, licenses, franchises, indentures and mortgages to which Borrower is a party or by which Borrower or any of its properties is bound. Without limiting the foregoing, Borrower shall pay all of its indebtedness promptly in accordance with the terms thereof. 3.8 Notice of Default; Perceived Breach. Borrower shall give written notice to Lender of the occurrence of any default, event of default or Event of Default under this Agreement or any other Loan Document promptly upon the occurrence thereof. Borrower agrees to give Lender prompt written notice of any action or inaction by or on behalf of Lender in connection with this Agreement or the Obligations that Borrower believes may be actionable against Lender or a defense to payment of any or all Obligations for any reason, 11 including, but not limited to, commission of a tort or violation of any contractual duty or duty implied by law. 3.9 Notice of Litigation. Borrower shall give notice, in writing, to Lender of (a) any actions, suits or proceedings, instituted by any persons whomsoever against Borrower or affecting any of the assets of Borrower wherein the amount at issue is in excess of Twenty-Five Thousand and No/100ths Dollars ($25,000.00) and (b) any dispute, not resolved within sixty (60) days of the commencement thereof, between Borrower on the one hand and any governmental regulatory body on the other hand, which dispute might materially interfere with the normal operations of Borrower. 3.10 Conduct of Business. Borrower will continue to engage in a business of the same general type and manner as conducted by it or NFI prior to the date of this Agreement. 3.11 ERISA Plan. If Borrower has in effect, or hereafter institutes, a Plan that is subject to the requirements of ERISA, then the following warranty and covenants shall be applicable during such period as any such Plan shall be in effect: (a) Borrower hereby warrants that no fact that might constitute grounds for the involuntary termination of the Plan, or for the appointment by the appropriate United States District Court of a trustee to administer the Plan, exists at the time of execution of this Agreement; (b) Borrower hereby covenants that throughout the existence of the Plan, Borrower's contributions tinder the Plan will meet the minimum funding standards required by ERISA and Borrower will not institute a distress termination of the Plan; and (c) Borrower covenants that it will send to Lender a copy of any notice of a reportable event (as defined in ERISA) required by ERISA to be filed with the Labor Department or the Pension Benefit Guaranty Corporation, at the time that such notice is so filed. 3.12 Dividends, Distributions, etc. Except for dividends and distributions required by Borrower's operating agreement, Borrower shall not, without the prior written consent of Lender, which consent shall not be unreasonably withheld, declare or pay any dividend of any kind, in cash or in property, on any class of the membership interests of Borrower, or purchase, redeem, retire or otherwise acquire for value any such membership interests, nor make any distribution of any kind in cash or property in respect thereof, nor make any return of capital of members, nor make any payments in cash or property in respect of any options, bonus or similar plan nor grant any preemptive rights with respect to the membership interests of Borrower. 3.13 Guaranties; Loans; Payment of Debt. Without the prior written consent of Lender, Borrower shall not guarantee nor be liable in any manner, whether directly or indirectly, or become contingently liable after the date of this Agreement in connection with the obligations or indebtedness of any person or entity whatsoever, except for the endorsement of negotiable instruments payable to Borrower for deposit or collection in the ordinary course of business. Without the prior written consent of Lender, Borrower shall not (a) make any loan, advance or extension of credit to any person other than in the normal course of its business, or (b) make any payment on any subordinated debt other than (i) trade payables 12 incurred in the ordinary course of Borrower's business and (ii) a note in favor of One Valley Bank in the amount of $6,519.68 which may be paid in its entirety. 3.14 Debt. Without the prior written consent of Lender, Borrower shall not create, incur, assume or suffer to exist indebtedness of any description whatsoever, excluding: (a) the indebtedness evidenced by the Note; (b) the endorsement of negotiable instruments payable to Borrower for deposit or collection in the ordinary course of business; (c) trade payables incurred in the ordinary course of business (each of which, individually, does not exceed $25,000) or other debts or expenditures permitted in any budget and use of funds duly approved by the Board of Managers of the Borrower, (d) the indebtedness listed on Schedule 2.1(m) hereto; and (e) equipment, furniture, fixtures needed in the normal course of business including, but not limited to, 200 laptop computers and printers, one passenger/cargo van, 40 desktop computers and three copiers. 3.15 No Liens. Without the prior written consent of Lender, Borrower shall not create, incur, assume or suffer to exist any lien, security interest, security title, mortgage, deed of trust or other encumbrance upon or with respect to any of its assets, now owned or hereafter acquired, except the following permitted liens (the "Permitted Liens"): (a) liens in favor of Lender; (b) liens for taxes or assessments or other governmental charges or levies if not yet due and payable; (c) liens on leased equipment granted in connection with the leasing of such equipment in favor of the lessor of such equipment; (d) liens described on Schedule 2.1(m) hereto; (e) statutory, mechanics', laborers' and materialmen liens arising in the ordinary course of business for sums not yet due; (f) statutory and contractual landlord liens under leases pursuant to which the Borrower is a lessee and not in default; (g) with regard to real property, any and all recorded restrictions (not including mortgages or security interests), reservations, covenants, conditions, oil and gas leases, mineral severances, rights-of-way, building or use restrictions, prescriptive rights, encroachments, protrusions, and party walls, and liens for taxes, assessments, and other governmental charges not yet due. 3.16 Mergers, Consolidations, Acquisitions and Sales. Without the prior written consent of Lender, Borrower shall not (a) be a party to any merger, consolidation or corporate reorganization, nor (b) purchase or otherwise acquire all or substantially all of the assets or stock of, or any partnership, membership or joint venture interest in, any other person, firm or entity, nor (c) sell, transfer, convey, or lease all or any substantial part of its assets, nor (d) create any Subsidiaries nor convey any of its assets to any Subsidiary. 13 3.17 Transactions With Affiliates. Borrower shall not enter into any transaction, including, without limitation, the purchase, sale or exchange of property or the rendering of any service, with any affiliate, except in the ordinary course of and pursuant to the reasonable requirements of Borrower's business and upon fair and reasonable terms no less favorable to Borrower than Borrower would obtain in a comparable arm's length transaction with a person not an affiliate. For the purposes of this Section 3.17, "affiliate" shall mean a person, corporation, partnership or other entity controlling, controlled by or under common control with Borrower. 3.18 Employment Contracts. Without the prior written consent of Lender, Borrower shall not (a) enter into any employment agreement or other written compensation agreement that has a term of greater than one year with any of Borrower's executive officers or (b) increase total compensation, without regard to commissions, paid to the executive officers of Borrower by more than ten percent (10%) per year; provided, however, that the Company may hire a controller and/or Chief Financial Officer which shall not constitute an increase in total base compensation paid to the executive officers for purposes of this section 3.18. 3.19 Environment. Borrower shall be and remain in compliance with the provisions of all federal, state and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations issued thereunder; notify Lender immediately of any notice of a hazardous discharge or environmental complaint received from any governmental agency or any other party; notify Lender immediately of any hazardous discharge from or affecting its premises; immediately contain and remove the same, in compliance with and to the extent required by all applicable laws; promptly pay any fine or penalty assessed in connection therewith, except to the extent Borrower in good faith contests any such fine or penalty to the extent Borrower follows all applicable laws in so doing; permit Lender to inspect the premises, to conduct tests thereon, and to inspect all books, correspondence, and records pertaining thereto; and at Lender's request, and at Borrower's expense, provide a report of a qualified environmental engineer, satisfactory in scope, form, and content to Lender, and such other and further assurances reasonably satisfactory to Lender that the condition has been corrected. 3.20 Landlord Consents. Borrower shall use its best efforts to obtain a Landlord Consent and Subordination of Lien, in a form reasonably satisfactory to Lender, from each landlord from whom Borrower now or hereafter may lease space. 3.21 Issuance of Membership Interests. Without the prior written consent of Lender, Borrower shall not issue any membership interests of Borrower or securities convertible into or exercisable for membership interests of Borrower, except in conjunction with the Avalon Transaction (as defined in Section 4.1(r)), with the issuance of any membership interests contemplated by Sections 3.3(b) or 3.12 of Borrower's Operating Agreement, or with any employee membership interest option plan of Borrower. Notwithstanding the foregoing sentence, Borrower is prohibited from issuing or having outstanding more than fifteen percent (15%) of its total membership interests under any such employee option plan. ARTICLE 4 CONDITIONS TO CLOSING 14 4.1 Closing of the Loan. The obligation of Lender to fund the Loan on the date hereof (the "Closing Date") is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions: (a) Borrower shall have performed and complied in all material respects with all of the covenants, agreements, obligations and conditions required by this Agreement. (b) Lender shall have received an opinion of the Borrower's counsel, LeClair Ryan, a Professional Corporation, dated the Closing Date, in form and substance satisfactory to Lender's counsel. (c) Borrower shall have delivered to Lender a Note executed by Borrower, in form and substance satisfactory to Lender. (d) Borrower shall have delivered to Lender a Membership Interest Purchase Warrant executed by Borrower, in form and substance satisfactory to Lender, and the related Warrant Valuation Letter executed by Borrower. (e) Borrower shall have delivered to Lender a Security Agreement and related UCC-1 Financing Statement(s), executed by Borrower, each of which is in form and substance satisfactory to Lender. (f) Borrower shall have delivered to Lender a Pledge and Security Agreement and related membership interest certificates, if any, membership interest powers and voting proxies executed by NFI and Kenneth C. Clarry, in form and substance satisfactory to Lender. (g) Borrower shall have delivered to Lender a Landlord's Consent and Subordination of Lien, executed by each of Borrower's landlords, in form and substance satisfactory to Lender. (h) Borrower shall have delivered to Lender an Assignment of Life Insurance Policy as Collateral executed by Borrower in duplicate, and a Life Insurance Assignment Questionnaire executed by Borrower with respect to an insurance policy insuring the life of Kenneth C. Clarry, in form and substance satisfactory to Lender, upon issuance of the policy. (i) Borrower shall have delivered to Lender an Intellectual Property Security Agreement executed by Borrower, in form and substance satisfactory to Lender. (j) Borrower shall have delivered to Lender an Authorization Agreement for Pre-Authorized Payments (Debit) executed by Borrower, in form and substance satisfactory to Lender. 15 (k) Borrower shall have delivered to Lender Guaranty Agreements, one executed by Kenneth C. Clarry and one by NFI, each in form and substance satisfactory to Lender. (l) Borrower shall have delivered to Lender copies of the Certificate of Formation and other publicly filed organizational documents of Borrower, certified by the Secretary of State or other appropriate public official in the state of Delaware, and a copy of Borrower's Operating Agreement. (m) Borrower shall have delivered to Lender certified (as of the date of this Agreement) copies of all corporate action taken by Borrower, including resolutions of its Board of Managers, authorizing the execution, delivery and performance of the Loan Documents. (n) Borrower shall have delivered to Lender a certificate as to the legal existence and good standing of the Borrower, issued by the Secretary of State or other appropriate public official in the state of Delaware. (o) Borrower shall have delivered to Lender certificates of the Secretaries of State or other appropriate public officials as to Borrower's qualification to do business and good standing in each jurisdiction in which a failure to be so qualified would have a material adverse effect on its financial condition or its ability to conduct its business in the manner now conducted and as hereafter intended to be conducted. (p) Borrower shall have delivered to Lender the Small Business Administration Forms 480, 652 and 1031 (Parts A and B) completed by Borrower. (q) Borrower shall have delivered to Lender the Small Business Administration Economic Impact Assessment completed by Borrower, in form and substance satisfactory to Lender. (r) Borrower shall have completed the sale of Membership Interests to Avalon Equity Fund, L.P., for a total of not less than Two Million One Hundred Thousand Dollars ($2,100,000) (the "Avalon Transaction"), as evidenced by the execution of Borrower's Operating Agreement and the Investment and Membership Interest Subscription Agreement of even date herewith, a copy of which is attached hereto as Exhibit 4.1(r) (the "Investment Agreement"). (s) Borrower shall have delivered to Lender evidence reasonably satisfactory to Lender that (A) NFI has transferred substantially all of its assets to Borrower and (B) the transactions contemplated by the Investment Agreement shall have closed or shall close without any condition other than the passage of time as contemplated by the Investment Agreement. ARTICLE 5 DEFAULT AND REMEDIES 16 5.1 Events of Default. The occurrence of any of the following shall constitute an Event of Default hereunder: (a) Default in the payment of the principal of or interest on the indebtedness evidenced by the Note in accordance with the terms of the Note, which default is not cured within five (5) days of receipt of written notice; (b) Any misrepresentation by Borrower, any guarantor of the Loan, or any Affiliate as to any material matter hereunder or under any of the other Loan Documents, or delivery by Borrower of any schedule, statement, resolution, report, certificate, notice or writing to Lender that is untrue in any material respect on the date as of which the facts set forth therein are stated or certified; (c) Failure of Borrower, any guarantor of the Loan, or any Affiliate to perform any of its obligations, covenants or agreements under this Agreement, the Note or any of the other Loan Documents; (d) Borrower (i) shall generally not pay or shall be unable to pay its debts as such debts become due, or (ii) shall make an assignment for the benefit of creditors or petition or apply to any tribunal for the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or (iii) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, or (iv) shall have had any such petition or application filed or any such proceeding commenced against it that is not dismissed within thirty (30) days, or (v) shall indicate, by any act or intentional and purposeful omission, its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial part of its assets, or (vi) shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of sixty (60) days or more; (e) Borrower shall be liquidated, dissolved, partitioned or terminated, or the charter or certificate of formation thereof shall expire or be revoked; (f) A default or event of default shall occur under any of the other Loan Documents and, if subject to a cure right, such default or event of default shall not be cured within the applicable cure period; (g) Borrower shall default in the timely payment or performance of any obligation now or hereafter owed to Lender in connection with any other indebtedness of Borrower now or hereafter owed to Lender; (h) Borrower shall have defaulted and continue to be in default in the timely payment of or performance of any covenant relating to any other indebtedness or obligation, which in the aggregate exceeds Fifty Thousand and No/100ths Dollars 17 ($50,000.00) or materially adversely affects Borrower's operations, properties or financial condition; (i) A significant change in the executive staff, ownership, or management of Borrower or NFI shall occur; or (j) Lender in good faith based on substantiated evidence believes its prospect of payment and performance is materially impaired. With respect to any Event of Default described above that is capable of being cured and that does not already provide its own cure procedure (a "Curable Default"), the occurrence of such Curable Default shall not constitute an Event of Default hereunder if such Curable Default is fully cured and/or corrected within thirty (30) days (ten (10) days, if such Curable Default may be cured by payment of a sum of money) of notice thereof to Borrower given in accordance with the provisions hereof; provided, however, that this provision shall not require notice to Borrower and an opportunity to cure any Curable Default of which Borrower has had actual knowledge for the requisite number of days set forth. 5.2 Acceleration of Maturity; Remedies. Upon the occurrence of any Event of Default described in subsection 5.1(d), the indebtedness evidenced by the Note as well as any and all other indebtedness of Borrower to Lender shall be immediately due and payable in full; and upon the occurrence of any other Event of Default described above, Lender at any time thereafter may at its option accelerate the maturity of the indebtedness evidenced by the Note as well as any and all other indebtedness of Borrower to Lender; all without notice of any kind. Upon the occurrence of any such Event of Default and the acceleration of the maturity of the indebtedness evidenced by the Note: (a) Lender shall be immediately entitled to exercise any and all rights and remedies possessed by Lender pursuant to the terms of the Note and all of the other Loan Documents; and (b) Lender shall have any and all other rights and remedies that Lender may now or hereafter possess at law, in equity or by statute. 5.3 Remedies Cumulative; No Waiver. No right, power or remedy conferred upon or reserved to Lender by this Agreement or any of the other Loan Documents is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy given hereunder, under any of the other Loan Documents or now or hereafter existing at law, in equity or by statute. No delay or omission by Lender to exercise any right, power or remedy accruing upon the occurrence of any Event of Default shall exhaust or impair any such right, power or remedy or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every right, power and remedy given by this Agreement and the other Loan Documents to Lender may be exercised from time to time and as often as may be deemed expedient by Lender. 18 5.4 Proceeds of Remedies. Any or all proceeds resulting from the exercise of any or all of the foregoing remedies shall be applied as set forth in the Loan Document(s) providing the remedy or remedies exercised, if none is specified, or if the remedy is provided by this Agreement, then as follows: First, to the costs and expenses, including without limitation reasonable attorneys' fees and disbursements, incurred by Lender in connection with the exercise of its remedies; Second, to the expenses of curing the default that has occurred, in the event that Lender elects, in its sole discretion, to cure the default that has occurred; Third, to the payment of the Obligations of Borrower, including but not limited to the payment of the principal of and interest on the indebtedness evidenced by the Note, in such order of priority as Lender shall determine in its sole discretion; and Fourth, the remainder, if any, to Borrower or to any other person lawfully thereunto entitled. ARTICLE 6 TERMINATION 6.1 Termination of this Agreement. This Agreement shall remain in full force and effect until the payment in full by Borrower of the Obligations, at which time Lender shall cancel the Note and deliver it to Borrower; provided, however, that the indemnities provided in Section 7.15 shall survive the termination of this Agreement. ARTICLE 7 MISCELLANEOUS 7.1 Performance By Lender. If Borrower shall default in the payment, performance or observance of any covenant, term or condition of this Agreement, which default is not cured within the applicable cure period, then Lender may, at its option, pay, perform or observe the same, and all payments made or costs or expenses incurred by Lender in connection therewith (including but not limited to reasonable attorneys' fees), with interest thereon at the highest default rate provided in the Note, shall be immediately repaid to Lender by Borrower and shall constitute a part of the Obligations. Lender shall be the sole judge of the necessity for any such actions and of the amounts to be paid. 7.2 Successors and Assigns Included in Parties. Whenever in this Agreement one of the parties hereto is named or referred to, the heirs, legal representatives, successors, successors-in-title and assigns of such parties shall be included, and all covenants and agreements contained in this Agreement by or on behalf of Borrower or by or on behalf of Lender shall bind and inure to the benefit of their respective heirs, legal representatives, successors-in-title and assigns, whether so expressed or not. 19 7.3 Costs and Expenses. Borrower agrees to pay all reasonable costs and expenses incurred by Lender in connection with the making of the Loan, including but not limited to filing fees, recording taxes and reasonable attorneys' fees, promptly upon demand of Lender. Borrower further agrees to pay all premiums for insurance required to be maintained by Borrower pursuant to the terms of the Loan Documents and all of the out-of-pocket costs and expenses incurred by Lender in connection with the collection of the Loan, amendment to the Loan Documents, or prepayment of the Loan, including but not limited to reasonable attorneys' fees, promptly upon demand of Lender. 7.4 Assignment. The Note, this Agreement and the other Loan Documents may be endorsed, assigned and/or transferred in whole or in part by Lender, and any such holder and/or assignee of the same shall succeed to and be possessed of the rights and powers of Lender under all of the same to the extent transferred and assigned. Lender may grant participations in all or any portion of its interest in the indebtedness evidenced by the Note, and in such event Borrower shall continue to make payments due under the Loan Documents to Lender and Lender shall have the sole responsibility of allocating and forwarding such payments in the appropriate manner and amounts. Borrower shall not assign any of its rights nor delegate any of its duties hereunder or under any of the other Loan Documents without the prior written consent of Lender. 7.5 Time of the Essence. Time is of the essence with respect to each and every covenant, agreement and obligation of Borrower hereunder and under all of the other Loan Documents. 7.6 Severability. If any provision(s) of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 7.7 Interest and Loan Charges Not to Exceed Maximum Allowed by Law. Anything in this Agreement, the Note or any of the other Loan Documents to the contrary notwithstanding, in no event whatsoever, whether by reason of advancement of proceeds of the Loan, acceleration of the maturity of the unpaid balance of the Loan or otherwise, shall the interest and other charges agreed to be paid to Lender for the use of the money advanced or to be advanced hereunder exceed the maximum amounts collectible under applicable laws in effect from time to time. It is understood and agreed by the parties that, if for any reason whatsoever the interest or loan charges paid or contracted to be paid by Borrower in respect of the indebtedness evidenced by the Note shall exceed the maximum amounts collectible under applicable laws in effect from time to time, then ipso facto, the obligation to pay such interest and/or loan charges shall be reduced to the maximum amounts collectible under applicable laws in effect from time to time, and any amounts collected by Lender that exceed such maximum amounts shall be applied to the reduction of the principal balance of the indebtedness evidenced by the Note and/or refunded to Borrower so that at no time shall the interest or loan charges paid or payable in respect of the indebtedness evidenced by the Note exceed the maximum amounts permitted from time to time by applicable law. 20 7.8 Article and Section Headings; Defined Terms. Numbered and titled article and section headings and defined terms are for convenience only and shall not be construed as amplifying or limiting any of the provisions of this Agreement. 7.9 Notices. Any and all notices, elections or demands permitted or required to be made under this Agreement shall be in writing, signed by the party giving such notice, election or demand and shall be delivered personally, telecopied, or sent by certified mail or overnight via nationally recognized courier service (such as Federal Express), to the other party at the address set forth below, or at such other address as may be supplied in writing and of which receipt has been acknowledged in writing. The date of personal delivery or telecopy or two (2) business days after the date of mailing (or the next business day after delivery to such courier service), as the case may be, shall be the date of such notice, election or demand. For the purposes of this Agreement: The Address of Lender is: Commerce Capital, L.P. Suite 2602 611 Commerce Street Nashville, TN 37203 Attention: Rudy Ruark Telecopy No.: 615/244-1432 with a copy to: Baker, Donelson, Bearman & Caldwell Suite 1700 511 Union Street Nashville, TN 37219 Attention: James L. McElroy, Esq. Telecopy No.: 615/726-0464 The Address of Borrower is: NeighborhoodFind.com, LLC 1228 Cedars Court P.O. Box 7786 Charlottesville, Virginia 22906 Attention: Kenneth C. Clarry Telecopy No.: 804/984-5111 with a copy to: LeClair Ryan, A Professional Corporation 707 East Main Street, Eleventh Floor Richmond, Virginia 23219 Attention: Gary D. LeClair, Esq. Telecopy No.: 804/783-2294 21 7.10 Entire Agreement. This Agreement and the other written agreements between Borrower and Lender represent the entire agreement between the parties concerning the subject matter hereof, and all oral discussions and prior agreements are merged herein; provided, if there is a conflict between this Agreement and any other document executed contemporaneously herewith with respect to the Obligations, the provision of this Agreement shall control. The execution and delivery of this Agreement and the other Loan Documents by Borrower were not based upon any fact or material provided by Lender, nor was Borrower induced or influenced to enter into this Agreement or the other Loan Documents by any representation, statement, analysis or promise by Lender. 7.11 Governing Law and Amendments. This Agreement shall be construed and enforced under the laws of the State of Tennessee applicable to contracts to be wholly performed in such State. No amendment or modification hereof shall be effective except in a writing executed by each of the parties hereto. 7.12 Survival of Representations and Warranties. All representations and warranties contained herein or in any of the Loan Documents or made by or furnished on behalf of Borrower in connection herewith or in any Loan Documents shall survive the execution and delivery of this Agreement and the other Loan Documents. 7.13 Counterparts. This Agreement may be executed by facsimile, in any number of counterparts and by different parties to this Agreement in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. 7.14 Construction and Interpretation. Should any provision of this Agreement require judicial interpretation, the parties hereto agree that the court interpreting or construing the same shall not apply a presumption that the terms hereof shall be more strictly construed against one party by reason of the rule of construction that a document is to be more strictly construed against the party that itself or through its agent prepared the same, it being agreed that Borrower, Lender and their respective agents have participated in the preparation hereof. 7.15 General Indemnification. Borrower agrees to indemnify Lender, its officers, directors, employees and agents (individually, an "Indemnified Party" and collectively, the "Indemnified Parties") and each of them and agrees to hold each of them harmless from and against any and all losses, liabilities, damages, costs, expenses and claims of any and every kind whatsoever (except those arising solely by reason of the gross negligence or wilful misconduct of an Indemnified Party) which may be imposed on, incurred by, or asserted against the Indemnified Parties or any of them arising by reason of any action or inaction or omission to any act legally required of Borrower (including as required pursuant hereto or pursuant to any other Loan Document). 7.16 Standard of Care; Limitation of Damages. Lender shall be liable to Borrower only for matters arising from this Agreement or otherwise related to the Obligations resulting from Lender's gross negligence or willful misconduct, and liability for all other matters is 22 hereby waived. Lender shall not in any event be liable to Borrower for special or consequential damages arising from this Agreement or otherwise related to the Obligations. 7.17 Consent to Jurisdiction; Exclusive Venue. Borrower hereby irrevocably consents to the jurisdiction of the United States District Court for the Middle District of Tennessee and of all Tennessee state courts sitting in Davidson County, Tennessee, for the purpose of any litigation to which Lender may be a party and which concerns this Agreement or the Obligations. It is further agreed that venue for any such action shall lie exclusively with courts sitting in Davidson County, Tennessee, unless Lender agrees to the contrary in writing. 7.18 Waiver of Trial by Jury. LENDER AND BORROWER HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS. [SIGNATURES ON THE FOLLOWING PAGE] 23 [SIGNATURE PAGE TO LOAN AGREEMENT] IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or have caused this Agreement to be executed by their duly authorized officers, as of the day and year first above written. LENDER: COMMERCE CAPITAL, L.P. a Tennessee limited partnership By: Commerce Equity Capital Corporation Title: General Partner By: /s/ Rudy Ruark ------------------------------------ Title: Vice President ------------------------------------ BORROWER: NEIGHBORHOODFIND.COM, LLC, a Delaware limited liability company By: /s/ Kenneth C. Clarry ------------------------------------------- Title: President ------------------------------------------- 24